Understanding Indian Business Culture
A good understanding of the underlying values, beliefs and assumptions of Indian culture and how they manifest themselves in the market and workplace is essential for the success of your business.
Understanding Indian Business Culture
India is a vast, populous and diverse nation encompassing many different identities, languages, cultures and religions. It is very difficult to make generalisations about Indian culture. There are, however, a few tips that can help you understand business culture in India and guide you in your Indian business venture.
INTRODUCTIONS AND GREETINGS IN INDIA
A flexible approach is important and it is often best to be guided by the person with whom you are meeting. Etiquette requires a handshake, although some Indians may use the namaste, a common greeting involving pressing your palms together with fingers pointing upwards, and accompanied by a slight bow. When entering a business meeting, always greet the most senior person first. When exchanging business cards, make sure to receive the card with your right hand and put it away respectfully. Small talk at the beginning of a business meeting is common and could include questions about your family. Equally it is perfectly appropriate to ask after the family of business partners, and in some instances this may be a good way of building trust.
In General Indians place importance on and a prefer using formal titles. So if you are meeting a doctor or a professor they may expect or appreciate being addressed by their given title. The exception of course if they indicate otherwise. Using a Mr. or Mrs. when addressing a colleague or someone senior is preferred. Women in the workplace are often addressed as Madam and men as Sir. The suffix Ji is commonly used especially when addressing someone senior both in age and in rank.
BE AWARE OF THE CULTURAL DIVERSITY; BE CAUTIOUS ABOUT GENERALISATIONS AND TAKE THE TIME TO DEVELOP RELATIONSHIPS.
Business dress code mostly consists of smart, comfortable clothing. A lightweight suit is appropriate and ties are not compulsory, except in traditional sectors such as banking or law. Women are advised to wear a trouser suit rather than a skirt. Keep in mind that India has a diverse and seasonal climate, so it is not always hot. Delhi and other parts of north India can be extremely cold in winter. Hotels and offices can also have very cold air conditioning, so it is well worth packing a sweater, or of course a pashmina.
BUSINESS LANGUAGE AND COMMUNICATION IN INDIA
English is widely spoken in business and is one of India’s official languages. Many Indians and business managers speak it fluently, though of course meaning can vary across cultures and countries. Indians may have a particular difficulty saying “no”, as it can convey an offensive message. Instead, they will prefer making statements such as “we’ll see”, “yes, but it may be difficult”, or “I will try” when they likely mean “no”. Listen carefully and be aware of the meaning behind these answers. Do not attempt to compel your contact to be more direct, as this can be counter-productive.
A good way to seek a more positive answer is to rephrase the question, for instance if you are trying to secure a meeting and there is some evasion, one approach is to ask what day and time would be convenient to meet. Similarly, if there is resistance in providing a purchase order, the question could be asked when it is likely that a purchase order will be raised. This type of questioning may provide a more meaningful response.
INDIAN BUSINESS MEETINGS AND NEGOTIATIONS
Give as much warning as possible of your intended dates of travel and try to schedule your meetings well in advance. If you require help with your India trip our business advisors based in both the UK and India can help source qualified leads, set up introductions, and arrange business meetings as well as plan productive business trips to India. Do bear in mind that the arrangements may change several times and may not be confirmed until the day of the meeting itself. Although punctuality is expected, be prepared for meetings to start and finish late and for interruptions to occur on a regular basis. Negotiations can be slow by UK standards. Be patient and demonstrate good character; forcefulness will likely drive your contact away.
UNDERSTANDING BUSINESS RELATIONSHIPS IN INDIA
Business relationships are of the utmost importance. Indians will base their decisions on trust and intuition as much as on statistics and data, so be mindful of the importance of a good working relationship. Take the time to engage in small talk and get to know your prospective partner. Rushing straight into the business issue could be perceived as rudeness.
THE ROLE OF HIERARCHY IN INDIAN BUSINESS
Indian businesses are often very hierarchically structured. In negotiations, decisions are generally made at the highest of levels. Therefore, unless the company director, owner or a very senior manager is present at a meeting, a decision is not likely to occur at that stage. Roles are well defined and tasks such as manual labour will only be carried out by a specific person. An Indian manager is typically not expected to carry out tasks that could otherwise be undertaken by someone at a lower level in the organisation.
When you choose to set up an India based office you will need to take into account these cultural differences. If your office does not follow a vertically structured hierarchy, with closely defined responsibilities, it will be important to create a dynamic feedback and communication mechanism between your UK and Indian employees to encourage collaboration. Interactions between UK and Indian staff may at times cause miscommunication. For example junior staff in India may not be used to making decisions or questioning senior staff with the same level of freedom as their UK counterparts.
You may well find that your Indian operations are much more flexible than your UK operations. Indian’s are often prepared to take on time sensitive and important tasks at the last minute.. Likewise your Indian staff may find the rigidity of timelines on the part of UK staff challenging and inflexible. Sensitising your UK and Indian employees about the cultural differences is therefore important for smooth day to day operations.
QUICK GUIDE TO INDIAN BUSINESS CULTURE
- There are many Indias within India. India is a multilingual, multi-ethnic and pluralistic society, and vast cultural differences can be seen between North and South India.
- Be aware of the cultural diversity and be cautious about generalisations. The great Cambridge economist Joan Robinson once observed: “Whatever you can rightly say about India, the opposite is also true.”
- English is the official language of business.
- Be prepared for meetings to start and finish late and for interruptions to occur on a regular basis
- There is a more formal and hierarchical relationship between managers and staff in India
- Indians place great value on relationships: take the time to develop contacts and relationships.
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As companies continue to expand across borders and the global marketplace becomes increasingly more accessible for small and large businesses alike, 2017 brings ever more opportunities to work internationally.
Multinational and cross-cultural teams are likewise becoming ever more common, meaning businesses can benefit from an increasingly diverse knowledge base and new, insightful approaches to business problems. However, along with the benefits of insight and expertise, global organizations also face potential stumbling blocks when it comes to culture and international business.
While there are a number of ways to define culture, put simply it is a set of common and accepted norms shared by a society. But in an international business context, what is common and accepted for a professional from one country, could be very different for a colleague from overseas. Recognizing and understanding how culture affects international business in three core areas: communication, etiquette, and organizational hierarchy can help you to avoid misunderstandings with colleagues and clients from abroad and excel in a globalized business environment.
Effective communication is essential to the success of any business venture, but it is particularly critical when there is a real risk of your message getting “lost in translation.” In many international companies, English is the de facto language of business. But more than just the language you speak, it’s how you convey your message that’s important. For instance, while the Finns may value directness and brevity, professionals from India can be more indirect and nuanced in their communication. Moreover, while fluent English might give you a professional boost globally, understanding the importance of subtle non-verbal communication between cultures can be equally crucial in international business.
What might be commonplace in your culture — be it a firm handshake, making direct eye contact, or kiss on the cheek — could be unusual or even offensive to a foreign colleague or client. Where possible, do your research in advance of professional interactions with individuals from a different culture. Remember to be perceptive to body language, and when in doubt, ask. While navigating cross-cultural communication can be a challenge, approaching cultural differences with sensitivity, openness, and curiosity can help to put everyone at ease.
“There is an atmosphere of understanding and support at Hult. Everyone has this respect and curiosity for all the cultural and personal differences between us. This environment encourages everyone to strive for excellence.”
Hult MBA Class of 2014
At Hult, we’re fortunate to have a student body made up of over 130 different nationalities. With the opportunity to study alongside peers from all corners of the globe, building cross-cultural communication skills is at the core of our business programs.
Watch Hult Professor Jean Vanhoegaerden discussing why culture is important in international business:
2. Workplace etiquette
Different approaches to professional communication are just one of the innumerable differences in workplace norms from around the world. CT Business Travel has put together a useful infographic for a quick reference of cultural differences in business etiquette globally.
For instance, the formality of address is a big consideration when dealing with colleagues and business partners from different countries. Do they prefer titles and surnames or is being on the first-name basis acceptable? While it can vary across organizations, Asian countries such as South Korea, China, and Singapore tend to use formal “Mr./Ms. Surname,” while Americans and Canadians tend to use first names. When in doubt, erring on the side of formality is generally safest.
The concept of punctuality can also differ between cultures in an international business environment. Different ideas of what constitutes being “on time” can often lead to misunderstandings or negative cultural perceptions. For example, where an American may arrive at a meeting a few minutes early, an Italian or Mexican colleague may arrive several minutes — or more — after the scheduled start-time (and still be considered “on time”).
Along with differences in etiquette, come differences in attitude, particularly towards things like workplace confrontation, rules and regulations, and assumed working hours. While some may consider working long hours a sign of commitment and achievement, others may consider these extra hours a demonstration of a lack of efficiency or the deprioritization of essential family or personal time.
3. Organizational hierarchy
Organizational hierarchy and attitudes towards management roles can also vary widely between cultures. Whether or not those in junior or middle-management positions feel comfortable speaking up in meetings, questioning senior decisions, or expressing a differing opinion can be dictated by cultural norms. Often these attitudes can be a reflection of a country’s societal values or level of social equality. For instance, a country such as Japan, which traditionally values social hierarchy, relative status, and respect for seniority, brings this approach into the workplace. This hierarchy helps to define roles and responsibilities across the organization. This also means that those in senior management positions command respect and expect a certain level of formality and deference from junior team members.
However, Scandinavian countries, such as Norway, which emphasize societal equality, tend to have a comparatively flat organizational hierarchy. In turn, this can mean relatively informal communication and an emphasis on cooperation across the organization. When defining roles in multinational teams with diverse attitudes and expectations of organizational hierarchy, it can be easy to see why these cultural differences can present a challenge.
As part of our mission to become the world’s most relevant business school, Hult is dedicated to preparing our students for the challenges and opportunities of working across borders and cultures. A big part of this preparation is understanding the role culture plays in international business. In many ways, the Hult classroom mirrors today’s business environment, with students of 130 nationalities collaborating and studying together. And not only are our students multicultural, our faculty is too. Many have lived, worked, and taught across Europe, Asia, the Middle East, and beyond.
Outside of the classroom, Hult students have the opportunity to experience life, culture, and commerce in today’s most dynamic business centers through our global campus rotation program. This international learning environment offers a truly global perspective and unique insight into culture and business practices from all over the world.
Discover how Hult’s global programs are designed to hone your cross-cultural competency
Have you ever encountered cultural differences in your workplace that were surprising? Tell us in the comments below.